Can you elaborate on it with an annotated chart? I don't see any relevance in them in the context of trend patterns according to the Dow Theory.
ES Trend Following
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Can you elaborate on it with an annotated chart? I don't see any relevance in them in the context of trend patterns according to the Dow Theory.
looking at low from 7/18, following the higher high, lower low methodology. but i see your rational based on Dow Theory.
keep doing what u r doing. i don't want to cloud your thinking, that was not my intention. i will sit back and watch from this point forward.
sorry for late reply.
Many thanks, Stok. There is actually one single source that expands on the Dow Theory in detail, and which highly correlates with my philosophy of markets:
http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:dow_theory
The criticism therein (at the bottom) is particularly interesting, and might explain why I find much wisdom in focusing on the 1H chart instead of the daily. The problem is that the classic DT will no doubt miss significant parts of a move, and comes with very inadequate risk management. If a breakout fails, the move back to the opposite direction is huge and can result in a large loss. Both issues are easily circumvented using the 1H time frame.
Furthermore, the article talks about primary and secondary trends. While it warns of adverse moves of the secondary trend, I see both types as an opportunity to participate in. The 1H does not differentiate much between primary and secondary trends as they are both long-lasting enough to harness solid profits from. In a post somewhere halfway through this thread I've uploaded my version of primary and secondary trends. This is a very apparent characteristic you'll notice once you are dealing with the dilemma of where best to set the stop at.
In my first post, I've illustrated the repetitive pattern of (1) reversal/ignition (2) trend (3) range (4) continuation/reversal. The entry opportunities are generally found in stages (1) and (4) while the stop-loss will take care of the exit.
On a side note, here is my current assessment of the SPY.
correction, higher highs, higher lows and to the downside lower highs, lower lows
Here we go again. Amazing gains of that long position evaporate, leaving me with some remains. Nevertheless I am reaching all time highs in my account after this stopout. I'm now looking for a sensible entry to the short side.
Total profit since beginning: $15,400
Total profit since beginning: $15,400
Bought @ 1340.00, Stop @ 1326.75
The market is shifting back to an uptrend pattern in the 1H time frame. Stop is placed at the trough created prior to this strong upswing.
The market is shifting back to an uptrend pattern in the 1H time frame. Stop is placed at the trough created prior to this strong upswing.
I can't believe this price action.
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